Finance (No.2) Bill, 2019

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A bill to give effect to the financial proposal for the financial year 2019-20 as introduce in Loksabha on 5/7/2019. The finance bill, speech of Minister of Finance Nirmala Sitharaman and Memorandum explaining the provisions relating to Direct Taxes are available on above citation of Magazine.

Finance (No.2) Act, 2019

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An Act to give effect to the financial proposal of the central government for the financial year 2019-20 as assented by president of India on 1/8/2019. The Act may be called Finance (No.2) Act, 2019. The certain provisions are deemed to have effect from 1st April, 2019. The certain provision are came to effect on such date as the central government may notify in the official gazette specify.

Section 139-Income tax return – Extension of Due date of filing Income tax return for the Assessment year 2019-20

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The CBDT vide circular F No. 225/157/2018/ITA.II dated 23/7/2019 hereby extend the “due date” as prescribed u/s. 139(1) of the Act for filing Income tax returns from 31st July 2019 to 31st August 2019 in cases of all tax payers who are liable to file their Income tax returns by the due date. The due date for filing Income tax return for the assessment year 2019-20 is 31st July 2019. The CBDT has clarified that the some of the tax payer are facing difficulties in filing their Income tax return due to various reason including extension of due date for issue of Form 16 for the assessment year 2019-20.

DTAA – Agreement for avoidance of double taxation and prevention of fiscal evasion with foreign countries – China – Amendment in notification No. GSR 331 (E) dated 5/4/1995

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The Central Government vide notification no SO 2562 (E) {No. 54/2019(F. No. 503/02/2008-FTD-II)} dated 17/7/2019 notifies the protocol, amending the agreement between the Government of the Republic of India and the Government of the People’s Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on Income which was sign at New Delhi, India on 18/7/1994. The protocol has been sign at New Delhi on 26/11/2018. The readers may refer to above citation for complete text of the notification.

Income declaration scheme, 2016-Section 187 of the scheme- Time for payment of tax-Issues in respect of third instalment under the Income Declaration Scheme, 2016

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The Central Board of Directs Taxes vide circular no. 15/2019(F.No. 225/282/2017-ITA.II), dated 12/7/2019 has issued the following clarification in respect of difficulties faced by the declarants of Income declaration scheme, 2016(IDS). Who are required to pay their determined liability towards tax, surcharge and penalty pertaining to 3rd Instalment as per the Form-2 issued by the Pr.CIT/CIT, by 30/9/2017. The declarants were facing the difficulties while effecting payment of 3rd Instalment of IDS around 30/9/2017 due to closure of Banks on account of holidays due to which they couldn’t effect payment of 3rd Instalment within the stipulated time. The representation were made to the Board u/s. 119 of the Income tax Act read with section 195 of the IDS to grant the appropriate relief.

The CBDT, in accordance with the provisions of section 10 of the General Clause Act, 1897, hereby directs that all payment made/effected by the declarants on 3/10/2017 shall also be deemed to have been paid by the due date for the 3rd Instalment i.e. 30/9/2017.

The CBDT clarified that the payment effected through cheque/RTGS/Electronic transfer by the declarant 3/10/2017, deemed extended date for the 3rd Instalment, which was credited by the Bank till 5/10/2017 shall be deemed to be paid by 30/9/2017.

The CBDT also instructed that the all actions which are to be completed as a consequence of this order either by the declarants or the departmental authorities are to be completed, by 31/8/2019.

Guidelines for Compounding of Offences under Direct Tax Laws, 2019

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Section 279(2) of the Act provides that any offence under Chapter XXII of the Act may, either, before or after the institution of proceedings, be compounded by the Pr. CCIT/CCIT/Pr. DGIT/DGIT. The necessary guidelines are issued in excise of power u/s. 119 of the Act read with explanation below section 279 (3) of the Act.

The CBDT vide Circular F. No. 285/08/2014-IT (IN.V)/147, dated 14/6/2019 issued, in supersession of earlier Guidelines on this subject, including the Guidelines of the Board issued vide F. No. 285/35/2013 IT(Inv. V)/108 dated 23/12/2014, the following Guidelines are issued for compliance by all concerned. These Guidelines shall come into effect from 17/6/2019 and shall be applicable to all applications for compounding received on or after the aforesaid date. The applications received before 17/6/2019 shall continue to be dealt with in accordance with the Guidelines dated 23/12/2014.

The Features of the Guidelines are as under:

Compounding is not a matter of right.

Applicability of these Guidelines to prosecutions under IPC

Classification of Offences.

Eligibility Conditions for Compounding

Offences normally not to be compounded

Relaxation of time

Authority Competent to Compound an Offence

Compounding Procedure

Compounding charges

Fees for compounding

Applicability of these Guidelines to offences under other Direct Tax Laws

Format of application in the Form of Affidavit for Compounding of Offences under Income-tax Act, 1961 to be submitted separately by each applicant

Suggested Check List for Compounding as per the Guidelines issued by the BCDT vide F. No. 285/08/2014-IT(Inv.V)dated 14/6/2019 on Compounding of Offences

Format for Order u/s. 279(2) of the Income-tax Act, 1961 for Compounding of an Offence as mentioned in Para 11(ii) of the Guidelines issued by the CBDT vide F.No. 285/08/2014-IT(Inv-V) dated 14/6/2019 on Compounding of Offences.

Format for Order u/s. 279(2) of the Income-tax Act, 1961 for rejecting the Compounding of an Offence as mentioned in Para 11(ii) of the Guidelines issued by the CBDT vide F.No. 285/08/2014-IT(Inv-V) dated 14/6/2019 on Compounding of Offences.